Published: Karianne Polimeni

We are proud to announce that the Law Review Note of 3L and Associate Notes Editor Karianne Polimeni will be published this spring!


Publication – Syracuse Law Review, Volume 68

Article – New York on Eyewitness Identifications: Progressive or Regressive?


Karianne Polimeni is a 3L at Syracuse University College of Law. Born and raised in Rochester, New York, Karianne will return to her hometown after graduation to work at Harter Secrest & Emery LLP.

Georgia Tax Bill Clear for Takeoff While Second Amendment Grounds Delta’s Exemption

Written By Erika L. Simonson

Since the February shooting in Parkland, Florida, several companies have ended their relationships with the National Rifle Association (NRA). One corporation, Delta Air Lines, responded to the tragedy with an attempt to “remain neutral” in the national gun debate by removing its discount for NRA members. However, instead of removing itself from the gun debate, Delta found its company at the center of the conversation.

Background

Seventeen students and adults were killed on February 14, 2018, when a lone gunman opened fire in Marjory Stoneman Douglas High School with an AR-15 assault rifle. According to The Guardian, this was the eighth shooting of the year in the United States to have resulted in a death or injury.

The nation’s response to Parkland was swift, led in part by the activism of some students present in the high school during the attack. Companies like Walmart, Kroger, L.L. Bean, and Dick’s Sporting Goods announced they would no longer sell firearms to anyone under 21 years of age. REI cut ties with Vista Outdoor, a company that manufactures guns and supports the NRA. MetLife, Hertz, Enterprise Holdings, and United Airlines ended discount programs for NRA members. Finally, Delta Air Lines also ended their NRA discount program in what they called an attempt to “remain neutral” in the national gun debate.

Action in Atlanta

While these companies’ actions were met with both applause and criticism nationwide, Delta became the center of attention for Georgia legislators. Within days of Delta’s statement about removing its NRA member discount and taking a neutral stance, the Georgia legislature struck down a jet fuel tax exemption that would have been lucrative for Delta, the state’s largest private employer.

Georgia began offering this tax break to a financially-struggling Delta after the recession in 2008. The state stopped offering that tax cut in 2015, but it was on track to reinstate it again this year. Days after Delta’s statement, however, the proposed tax break was killed in the Georgia Senate, following a push by Lieutenant Governor Casey Cagle. Georgia Governor Nathan Deal is expected to sign the tax bill, sans jet fuel exemption. This missed tax exemption opportunity for Delta will add up to nearly $50 million a year.

Delta and First Amendment Rights

The first free speech case involving a business was decided in 1952 in Joseph Burstyn v. Wilson, in which the Supreme Court of the United Stated (SCOTUS) struck down a New York law that forbid the commercial showing of any film deemed “sacrilegious.” In 1976, in Virginia Pharmacy Board v. Virginia Citizens Consumer Council, SCOTUS created the “commercial speech doctrine,” which gave courts the power to strike down laws regulating the market and advertising of products with no artistic, political, or expressive component. More recently, in 2010, SCOTUS held in Citizen’s United v. Federal Election Commission that corporations have the same free speech rights as individuals under the First Amendment. This means that SCOTUS’ previous decisions on freedom of speech would also protect the right of corporations – including Delta – to engage in political speech, symbolic speech, and to be free from compelled speech. In consequence, several media outlets have accused Georgia of violating Delta’s First Amendment rights.

Media outlets often rely on the 2011 decision Sorrell v. IMS Health for support of a First Amendment violation. In that case, SCOTUS struck down a Vermont statute, the Prescription Confidentiality Act, that prohibited the sale or use of a doctor’s prescribing habits for marketing purposes. The Act was passed in response to several pharmaceutical companies using individual doctors’ prescribing habits without the doctors’ consent. SCOTUS held that content-based or speaker-based restrictions on non-misleading commercial speech regarding lawful goods or services should be subjected to heightened judicial scrutiny. This heightened level of scrutiny requires the government to demonstrate with greater certainty that its purposes could not be achieved by means that do not entail speech restrictions.

Therefore, while on its face, Georgia’s “retaliation” against Delta may seem like a violation of Delta’s free speech rights, there is uncertainty as to whether any case would get very far in the courts. This is because this case is distinct from Sorrell, as Georgia did not pass a law that infringed upon Delta’s free speech, rather, Georgia declined to pass a law at all. Further, the Georgia legislators provided seemingly sufficient non-speech reasons for the tax bill.

Conclusion

Atlanta is Delta’s largest hub, at three times the size of the next two busiest hubs. Delta is unlikely to move its corporate headquarters, as it would be costly to separate the headquarters and Delta executives from the busiest hub. Georgia is also inclined to keep ties with the airline, since the Atlanta airport – Hartfield-Jackson – remains the busiest airport in the world. Moreover, Delta employs more than 30,000 people in the state and contributes more than $43 billion to the state’s economy each year.

In consequence, this missed opportunity of a $50-million savings may just be a ‘drop in the bucket’ for Delta, who reported more than $41 billion in revenue last year. So, despite the loss of this exemption, it is not likely we’ll see Delta break ties with Georgia anytime soon. It remains to be seen whether a lawsuit, or hardline conversation, will be born of this controversy.

 

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Sources Cited

Alana Wise, Georgia Lawmakers Kill Proposed Tax Break in Dig at Delta Over NRA Fight, Reuters (Mar. 1, 2018), https://www.reuters.com/article/us-usa-guns-delta-air-tax/georgia-lawmakers-kill-proposed-tax-break-in-dig-at-delta-over-nra-fight-idUSKCN1GD6M7.

Citizens United v. Federal Trade Commission, 558 U.S. 310 (2010).

Danielle Weiner-Bronner, Why Delta and Atlanta Need Each Other, CNN (Mar. 1, 2018), http://money.cnn.com/2018/03/01/news/companies/delta-atlanta-tax-break/index.html.

Jason Hanna, Faith Karimi and Emanuella Grinberg, Gunman Confessed to Florida High School Shooting, Police Say, CNN (Feb. 15, 2018), https://www.cnn.com/2018/02/15/us/florida-high-school-shooting/index.html.

Joseph Burnstyn, Inc., v. Wilson, 343 U.S. 495 (1952).

Julia Horowitz and Jackie Wattles, These Companies are Distancing Themselves From the Gun Industry, CNN (Mar 3, 2018), http://money.cnn.com/2018/03/03/news/companies/companies-cutting-ties-nra-gun-lobby/index.html.

Julie Creswell and Michael Corkey, Walmart and Dick’s Raise Minimum Age for Gun Buyers to 21, N.Y. Times (Feb. 28, 2018), https://www.nytimes.com/2018/02/28/business/walmart-and-dicks-major-gun-retailers-will-tighten-rules-on-guns-they-sell.html.

Lois Beckett, How Many U.S. School Shootings Have There Been in 2018 So Far?,  Gaurdian (Feb. 15, 2018), https://www.theguardian.com/world/2018/feb/14/school-shootings-in-america-2018-how-many-so-far.

Meagan Flynn, Boycott: REI, Mountain Equipment Co-Op Stop Selling Major Outdoor Brand with NRA Ties, Wash. Post (Mar. 2, 2018), https://www.washingtonpost.com/news/morning-mix/wp/2018/03/02/gun-boycott-rei-mountain-equipment-co-op-stop-selling-major-outdoor-brand-due-to-its-weapons-sales-nra-ties/?utm_term=.2c577a8a4071.

Sorrell v. IMS Health, Inc., 564 U.S. 552 (2011).

Tiffany Hsu, ‘Our Values Are Not For Sale,’ Says Delta C.E.O. as Airline Considers Ending Divisive Discounts, N.Y. Times (Mar. 2, 2018), https://www.nytimes.com/2018/03/02/business/delta-nra-discount.html.

Virginia State Pharmacy Board v. Virginia Citizens Consumer Council, 425 U.S. 748 (1976).

Photo courtesy of Small Town Rules.

Published: Emily Keable

We are proud to announce that the Law Review Note of 3L and Executive Editor Emily Keable has been published!


Publication  Journal of Law and Public Policy, University of St. Thomas School of Law, Volume 11, Issue 2

Article – Building on the Tiny House Movement: A Viable Solution to Meet Affordable Housing Needs


Emily Keable is a 3L at Syracuse University College of Law. She was born in Chazy, NY, and she attended college at St. Lawrence University. She anticipates remaining in NY to pursue her professional career.

While at Syracuse, Emily has been a Research Assistant to Professor Robin Malloy and has participated in the SUCOL Low Income Taxpayer Clinic. In her free time, Emily enjoys hiking, skiing, baking, and spending time with family and friends.

Find Emily’s recently-published article here.

 

Rick Gates Pleads Guilty to Criminal Charges

Written by Lisa Knab

 

Background

Rick Gates, a former campaign official for President Donald Trump, pleaded guilty to two criminal charges on February 23, 2018. The plea came less than 24 hours after a grand jury indicted him on a host of new charges.

With 32 total indictments, growing from the initial eight he faced as of October 2018, Gates sent a letter sent to family and friends. In it, he explained that despite his “initial desire to vigorously defend” himself, Gates made the decision to plead guilty in an attempt to protect his four children. In weighing a guilty plea against the costly and time-consuming process of proceeding to trial, Gates stated that he felt he would “better serve [his] family moving forward by exiting [the] process.”

The charges Gates pleaded guilty to include conspiring to defraud the United States and lying to the Federal Bureau of Investigation (FBI) when trying to secure an earlier plea deal. The conspiracy charge stemmed from an intense investigation, led by special counsel Robert Mueller, which uncovered what prosecutors allege to be a decade-long scheme. Prosecutors claim that Gates, led by long-time business partner Paul Manafort, laundered millions of dollars the pair made while working for a political party in Ukraine. According to the prosecution, the pair used the money to buy property and luxurious goods to support Manafort’s “lavish lifestyle.”

Manafort, who was also indicted on 32 charges, has maintained his innocence. In a statement made shortly after Gates’ guilty plea, Manafort stated that he “had hoped and expected [his] business colleague would have had the strength to continue the battle to prove [their] innocence.” Nevertheless, Manafort stated that Gates’ decision did “not alter [his own] commitment to defend [him]self against the untrue piled-up charges contained in the indictments against [him].”

The Plea Deal

As part of the deal, in exchange for admitting to conspiring to defraud the United States and lying to the FBI, the prosecution has agreed to drop various charges, including a forfeiture demand that, if convicted, could have made Gates liable for up to $18 million.

In addition, the deal provides that Gates will cooperate with Mueller and his associates in their continued investigation of Manafort. This is significant because, as Manafort’s long-time, right-hand man, Gates was trusted with information regarding Manafort’s alleged schemes.

Without the deal, and without considering the dropped charges, Gates could have faced up to 10 years in prison on the conspiracy and lying charges alone. However, under the deal, prosecutors have agreed that Gates will receive a recommended sentence of only four-to-six years, as well as a fine between $20,000 and $200,000. The final sentence will factor in Gates’ cooperation in aiding the investigation of Manafort.

Finally, Gates’ lawyer retains the right to advocate for an even lesser sentence based on Gates’ “disproportionate conduct” as compared to Manafort. A status hearing has been set for May 14, 2018, at which time the government will update the court on the status of the case, including Gates’ cooperation up until that point.

Cooperation and Additional Factors

While everyone following the investigations led by Mueller will likely have an opinion on the sentence Gates should receive, the final decision is in the hands of the judge. In addition to considering Gates’ cooperation and “disproportionate conduct,” the judge may consider various other mitigating or aggravating factors. An aggravating factor is a circumstance which would merit a greater sentence, while a mitigating factor is one which would support a lesser sentence.

As explained above, the judge will consider Gates’ cooperation when imposing a sentence. Depending on the actions of Gates in the coming weeks, this could serve as either a mitigating or aggravating factor. In other words, if Gates cooperates only minimally, the judge may view this as cause for a greater sentence. On the other hand, if Gates provides the government with a great deal of useful information concerning the activities of Manafort, the judge may view this as warranting a lesser sentence. Keeping in line with precedent, it is likely the judge will also consider any “disproportionate conduct,” any existence, or lack thereof, of a prior criminal record, as well as whether Gates feels genuine remorse.

Conclusion

While part of Gates’ plea deal includes a recommended sentence of four-to-six years, the actual sentence handed down is dependent upon factors weighed by the judge. The main factor for consideration will be his cooperation with the government in the investigation of Manafort. Therefore, it remains to be seen whether Gates’ actions, over the next few weeks, will play a key role in the fate of Manafort and/or mitigate the length of his own sentence.

 

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Sources Cited

Aggravating and Mitigating Factors, JUSTIA (last visited Feb. 24, 2018).

Debra Cassens Weiss, Former Trump campaign aide Rick Gates pleads guilty in special counsel probe, ABA Journal (Feb. 23, 2018).

Devlin Barnett and Spencer S. Hsu, Former Trump campaign official Rick Gates pleads guilty to 2 charges, The Washington Post (Feb. 23, 2018).

Zoe Tillman, Former Trump Campaign Adviser Rick Gates Pleaded Guilty To Conspiracy And Lying To Investigators, BuzzFeed News (Feb. 23, 2018).

Photo created by a court artist, courtesy of VOA News.

February 2018: Elizabeth August (’94)

Since the beginning, Elizabeth August has had a passion for working with students. Little did she know, that passion would take her on an exciting career that would land her back in the place where it all started: Syracuse University College of Law.

Elizabeth August Teaching Professor, Syracuse Law

In 1986, Elizabeth graduated from St. Lawrence University in Canton, New York. She had always wanted to be a part of education, so she accepted aposition in Boston to run youth programs for an inner-city YMCA. It was there that she got the itch to go to law school.

“I saw how social welfare programs, poverty, and violence impacted a community, and I thought I could go to law school and learn more how to positively impact communities like the one I worked in.”

So, after a few years there, Elizabeth headed off to Syracuse Law. Her most significant interests were always public policy and family law, but she kept an open mind to other opportunities that were presented to her. One of those opportunities? Syracuse Law Review.

During her time on Law Review, she served as the Lead Articles Editor, where she worked to compile articles for books. It required a lot of reading and reviewing, and it helped her to “hone [her] legal research skills[.]”

Immediately following graduation, Elizabeth entered private practice as an associate at Bond, Schoeneck & King in Syracuse, New York. There, she focused mostly on corporate clients and school districts. Whether it was business acquisitions and corporate formations, or the formulating and drafting of policies for a school district, Elizabeth was constantly researching and writing. And it didn’t end there.

Elizabeth then went on to have her own law office, where she represented individuals in real estate transactions and, again, was drafting numerous documents for business clients. Quickly thereafter, however, one of her most influential professors, Bob Rabin, got in touch.

“I had always wanted to teach, and when SUCOL revamped its legal writing program, he reached out to me.”

Before she knew it, Elizabeth was a teaching professor at her own alma mater, teaching “Legal Communication and Research” courses to students across the board.

“The most meaningful opportunity I have had is teaching at SUCOL and developing my Transactional Drafting course,” she said. “SUCOL had never offered a drafting course before. I believe that understanding contract language and organization is an essential skill for all attorneys, since you are always being asked to review or draft agreements.”

Indeed, Transactional Drafting has been a highly sought-after course by 2Ls wishing to enter the private sector upon graduation. And, like Professor Bob Rabin was an impactful professor for Elizabeth, Elizabeth is now serving in that same capacity for her students.

“To be a successful attorney, you must have strong legal research and writing skills,” she said. “Helping student hone those skills over the last 18 years has been incredibly rewarding.”


This story was written by Legal Pulse Editor Samantha Pallini and is the seventh installment of Syracuse Law Review’s monthly feature, “Alum of the Month.” Stay tuned for next month’s feature on another noteworthy Syracuse Law Review alumnus!


 

Published: Jordan Charnetsky

We are proud to announce that the Law Review Note of 3L and Associate Notes Editor Jordan Charnetsky will be published this spring!


Publication  Syracuse Law Review, Volume 68, Book 2

Article Revolutionizing Fractured Drug Treatment Courts: An Analysis and Critique of LEAD and CARA


Jordan Charnetsky is a 3L at Syracuse University College of Law. Born and raised in Vestal, New York, Jordan will return to his hometown after graduation to work at Levene, Gouldin & Thompson, LLP in the litigation department.

While at Syracuse, Jordan has been a Research Assistant for Professor Lauryn Gouldin and Professor Todd Berger, as well as the Special Projects Lead for the Syrian Accountability Project. He has also externed with the Onondaga County District Attorney’s Office.

In his free time, Jordan enjoys snowboarding, reading, and traveling.

Powerball Winner Fights to Remain Anonymous

Written By Meghan Vumback

 A New Hampshire woman (“Jane Doe”) who won a $559.7 million Powerball jackpot in January can begin collecting her money while a Judge determines whether she can remain anonymous.

Background

Jane Doe purchased the Jan. 6 winning Powerball ticket at Reeds Ferry Market in Merrimack, New Hampshire . Upon realizing that the winning numbers matched the numbers on her ticket, she went to the Commission website and read the instructions on the back of her ticket. In following the Commission’s instructions, Jane Doe printed her name, address, city, phone number, and signed the back of her ticket. However, she was not aware that in doing so she was signing away her anonymity.

Upon retaining counsel, Jane Doe learned that the State of New Hampshire allows tickets to be signed by the trustee of a designated trust so that a winner can maintain privacy, and that in signing her name on the back of her winning ticket, she had relinquished her right to that privilege. Essentially, because she used her personal information, and not a designated trustee to sign the back of her lottery ticket, that information will become public once she submits her ticket to the Commission.

Oral Arguments

Jane Doe filed a complaint in the New Hampshire Superior Court in an effort to remain anonymous. Due to the size of her award, she is seeking to have her name, address, and other identifying information exempt from disclosure. She further requests that the Court authorize the winning ticket to be assigned to a trust that she has created for this purpose. Alternatively, Jane Doe requests that she be allowed to “white out” her name and replace the information with that of the trust she created.

Jane Doe is arguing that her privacy interests significantly outweigh the need for her information to become public. As a long-time resident of New Hampshire, and an engaged member of the community, she wishes to continue having the freedom to participate in community events and everyday activities without being targeted as the winner of half of a billion dollars.

The New Hampshire Attorney General’s office, which is representing the Commission, filed a legal response arguing that releasing Jane Doe’s information is consistent with New Hampshire’s Right-to-Know law, in which lottery tickets with the winner’s name, hometown, and prize amounts must be released.

The Attorney General’s office is asserting that the public’s right to know who won the nation’s eighth-largest lottery jackpot does outweigh Jane Doe’s minimal privacy interests. They argue first that failing to publicize her identity could erode trust in the lottery system. Second, they argue that the disclosure of a person’s name and hometown does not implicate substantial privacy interests.

What’s Next?

In order to make a determination on this case, the judge is going to have to look at the totality of the circumstances and balance the interests of both parties to determine which interest prevails: the privacy interests of Jane Doe, or the public’s interests in transparency in the operation of lottery games.

The $559.7 million Powerball jackpot is available for distribution and has been since January 22, 2018. Because Jane Doe has not yet submitted her ticket to the Commission, she is losing about $14,000 a day in interest. In consequence, a judge has allowed for the jackpot to be put into a temporary trust until a final ruling is made. It is unclear when Judge Charles Temple will decide the case.

“Regardless of whether the court ultimately decides in her favor, Ms. Doe has a strong interest in seeing this matter resolved as quickly as possible so that the prize can be claimed without further loss of interest.”

 

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Sources Cited

Aric Jenkins, New Hampshire’s Attorney General to Powerball Winner: You Can’t Remain Anonymous, Time (Feb. 13, 2018).

New Hampshire Powerball Winner Argues for Privacy But to Also Receive Winnings, CBS (Feb. 13, 2018).

Cleve R. Wootson Jr., All she has to do to collect a $560 million lotto jackpot is make her name public. She refuses., The Washington Post (Feb. 13, 2018).

Maurice Kreis, Jane Doe vs. Right-to-Know in NH: A Tragedy in the Making, InDepth.org (Feb. 16, 2018).

Complaint For Declaratory Judgement and Injunctive Relief and Request for Immediate and Expedited Hearing as Time is of the Essence, Jane Doe v. New Hampshire Lottery Commission (Jan. 29, 2018).

Photo courtesy via WEAU 13 News.

Election of Volume 69 Staff

It is with great pride that we announce to you the election of the Senior Editorial Staff of Volume 69 of the Syracuse Law Review! The new staff will be fully transitioned into their new positions by June 1, 2018. Please join us in congratulating this fantastic group of students!

Chuck Norris Hits CBS, Sony With $30M Lawsuit for ‘Walker, Texas Ranger’ Lost Profits

Written by Stefani B. Joslin

Background

From 1993 to 2003, actor Chuck Norris starred in the hit television series, Walker, Texas Ranger (“Walker”). When the show began in 1993, Norris entered into a contract with CBS and SONY Pictures over how he and his company, Top Kick Productions (“Top Kick”), would receive profits from the show.

Recently, Norris claimed he has not received the profits that were promised to him not under the agreement. Through Top Kick, he filed suit on January 31st in the Los Angeles Superior Court against CBS and SONY for $30 million, alleging breach of contract and breach of the implied covenant of good faith and fair dealing.

The Agreement

CBS and SONY had contractually agreed to pay Norris, through Top Kick, 23% of the revenue from the show. This agreement also prevented CBS from deducting revenue costs that were unrelated to the production of Walker.

The 23% clause was meant to be stable over time and have similar longevity. A layout of how profit would be calculated through the showing of the program, for instance on television or DVDs, was also set out in the contract. CBS and SONY were obligated to accurately report revenue, as well as other expenses related to Walker, in order for Top Kick to be paid the proper profit percentage. All third party agreements were also to be accounted for and shown to Norris and Top Kick.

The Complaint

Norris’ complaint states three causes of action: (1) breach of contract against CBS; (2) breach of the implied covenant and good faith and fair dealings against both companies; and (3) accounting against both companies.

Norris claims CBS and SONY have materially breached the contract by consciously seeking to market and sell Walker in a way that still collects revenue but does not pay Norris or Top Kick. The companies have allegedly used fees and revenues, through the continuous exploitation of Walker, to materially breach the agreement, failing to pay the profits owed to Norris.

According to Norris, Walker’s success is due to his work and popular image. In direct response to that, Norris alleges CBS used his “imagery” of being a social icon and movie star as the distributor of the Walker series on television and video. “CBS was among the networks that were fully aware of Chuck Norris’ success, history, brand, and image,” Norris’ lawyer stated, “which resulted in CBS agreeing to become the primary distributor of [Walker].”

Norris’ complaint also states the companies have rejected and ignored deals with third parties that were willing to pay premium for Walker, and they “instead chose to engage in self-dealing transactions to benefit only themselves.” One example is Katz Broadcasting, which had a license for Walker and wished to extend its license through SONY for an additional four years, totaling $5 million dollars. SONY, according to the complaint, ignored Katz’s offer and allowed for the license period to lapse, giving Walker away to a lower-tier cable network that was owned by SONY.

Moreover, no agreements or copies were ever presented or reported to Norris or Top Kick, relating to CBS and SONY entering into licensing and other agreements with third parties.  By failing to report these agreements with third parties, as well as ignoring third parties who wanted to pay a larger percentage, Norris claims the companies did not act in good faith within their contractual obligations and have used his popularity and “imagery” as a social icon for exploitation.

The Consequences

With changes in technology, CBS and SONY have been using streaming video-on demand (“S-VOD”), instead of focusing on television and DVDs. This, according to the contract, falls under exploitation. As a result, since 2004, that S-VOD revenue has not been accounted for when calculating Walker’s profit.

The complaint states Top Kick and Norris do not know how much revenue has been generated through S-VOD alone, since the companies had failed to accurately report. With the show’s success and popularity, however, more than $692 million has been generated in total revenue. According to Norris, CBS and SONY have failed to pay him his share “of the profits earned from any, and all, exploitation of Walker.”

Norris and Top Kick have requested a trial by jury. No comment has been made by officials from CBS or SONY.

 

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Sources Cited

Ashley Cullins, Chuck Norris Hits CBS, Sony With $30M Lawsuit over ‘Walker, Texas Ranger’ Profits, The Hollywood Reporter (Feb. 1, 2018,).

Complaint and Demand for Jury Trial, Top Kick Productions v. CBS Broadcasting, CBS Corp., SONY Pictures Television, No. BC-692372 (Super. Ct. of Cal., Los Angeles Ctny.).

Denise Petski, Chuck Norris Sues CBS & Sony TV For $30M Over ‘Walker, Texas Ranger’ Profits, Deadline (Feb, 1, 2018).

Douglas Ernst, Chuck Norris takes on Sony, CBS in $30M lawsuit over ‘Walker, Texas Ranger’ profits, Washington Times (Feb 2, 2018).

Nicole Bitette, Chuck Norris is suing CBS, Sony for $30 M over ‘Walker, Texas Ranger’ profits, N.Y. Daily News (Feb. 2, 2018).

Photo courtesy of Amazon.

The Opioid Crisis: Lawsuits Filed Against Big Pharma and Drug Distributors

Written By Liz Lehmann

On January 23, 2018, Onondaga County (the “County”) joined many cities and counties across the nation in suing pharmaceutical companies and drug distributors over their role in the opioid crisis.

Background

Opioids killed more than 42,000 people in 2016 nationwide, 142 of which were in Onondaga County. Forty percent of all opioid overdose deaths involved a prescription opioid.  The amount of prescription opioids sold to pharmacies, hospitals and doctors’ offices has quadrupled in the last decade, where the overall change in the amount of pain that Americans reported has been unchanged. Studies indicate that many users begin with pills but shift to injecting heroin due to its cheaper cost.

In response, individuals, as well as municipal and county governments, are filing lawsuits against the leading opioid manufacturers and distributors, alleging that the opioid addition stems from the manufacturers’ over-promotion and sales of prescription opioid medications, such as OxyCotin, Percocet, Vicodin, and numerous generics.

The Complaint

The County’s Complaint names over two-dozen defendants, including Purdue Pharma (manufacturers of OxyCotin), Teva Pharma and its subsidiary Cephalon (manufacturers and distributors of fentanyl, a synthetic opioid), Johnson & Johnson and its subsidiary Janssen Pharmaceuticals, and Endo Health Solutions (manufacturers of oxymorphone and hydrocodone products).

The causes of action consist of negligence, fraud, deceptive acts and practices, false advertising, and the Racketeer Influenced and Corrupt Organizations Act (“RICO”).  The Complaint alleges that defendants disseminated false and misleading messages, downplaying the seriousness of prescription opioids and creating false perceptions that they were safe and effective for the long-term treatment of pain.

The County’s claim for relief include costs for providing medical care; treatment, counseling, and rehabilitation services; treatment of infants born from opioid-related medical conditions; care for children whose parents suffer from opioid-related disability; and costs associated with law enforcement and public safety relating to the opioid epidemic.

Another Big Tobacco Moment?

The growing number of lawsuits against drug manufacturers and distributors has led some to wonder whether the opioid crisis will deal Big Pharma its Big Tobacco moment. In the 1990s, several states—including New York—sued the major cigarette manufacturers to recover Medicaid and other costs associated with treating sick and dying cigarette smokers. In 1998, the cigarette manufacturers and 46 states entered into a Master Settlement Agreement, imposing prohibitions and restrictions on tobacco advertising and practices that sought to hide negative information about smoking, in addition to the requirement that a tobacco prevention foundation be created. The Agreement also had a $248 billion civil payout, from which hundreds of millions of dollars went to New York State.

Experts and attorneys distinguish the present litigation from the tobacco settlement, however. The big difference? The current cases involve causes of action against companies who appear to be fully compliant with the law. Unlike tobacco, where cigarettes are bought directly from the manufacturer to the consumer and can harm smokers and nonsmokers alike, prescription opioids are individually taken upon the recommendation and advice of a doctor. Addictions arise from the misuse of the prescription opioid. Should the drug manufacturer be responsible for such misuse?

Another shortcoming may be the plaintiffs’ failure to demonstrate specific instances where drug companies misled doctors or consumers. A recent lawsuit filed by the City of Chicago against Big Pharma had four out of five of its defendant manufacturers dismissed for such lack of specificity. The remaining defendant—Purdue—had already added clear warnings of the risks of addiction to its OxyCotin labels after pleading guilty to criminal misbranding in 2007. Also as a result from the 2007 charges, Purdue changed its manufacturing process to include “abuse-deterrent technology,” making the drugs nearly impossible to crush, snort, or inject.

Overall, as a general matter, it may be difficult for the courts to assign blame when it comes to the opioid epidemic, where pain medications are lawful, approved, and regulated by the FDA, in addition to including many intermediaries.

Big Pharma’s Response

Some of the named defendants have issued public release statements. Regarding this Complaint, Purdue stated:

We maintain that the allegations made in these lawsuits against our company are baseless and unsubstantiated.  Our actions in the marketing and promotion of our opioid pain medicines were appropriate and responsible.  At the same time we recognize that opioid abuse and addiction are serious public health issues that must be addressed. Finding those solutions will require collaboration among many stakeholders across the country.  We look forward to being a part of the ongoing dialogue and finding ways to address the crisis.

Despite Big Pharma’s denial of wrongdoing, settlements have been reached in other lawsuits involving opioid manufacturers and distributors. In late 2015, Purdue paid $24 million in a settlement agreement to the state of Kentucky on the claim that Purdue had marketed their OxyCotin drug as safe. In 2017, Mallinckrodt PLC—a defendant in the County’s present lawsuit—paid $35 million to resolve an investigation into their monitoring and reporting methods for suspicious orders of opioids. Costco paid $11.75 million in 2017 based on an investigation indicating that they had irresponsibly filled improper or incomplete prescriptions.

What’s Next?

Settlement discussions are underway in jurisdictions across the nation.  Some manufacturers, such as Purdue, have proposed a global settlement in an attempt to cease investigations and lawsuits. However, lengthy litigation will likely ensue and it is expected that more cities and counties will join in the legal onslaught.

 

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Sources Cited

Andrew Donovan, Onondaga County Blames Opioid Manufacturers and Distributors for Heroin Crisis, Files Lawsuit, LocalSYR.com (Jan. 23, 2018),

Complaint and Jury Demand, County of Onondaga v. Purdue Pharma, L.P. et al. (N.D.N.Y. 2018).

Eric Heisig, Federal Judge Presiding Over Opioid Litigation Will hold Jan. 31 Conference for Settlement Talks, Cleveland.com (Jan. 12, 2018).

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Photo courtesy of TLI.